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Property investment decision making by Australian REITs

David Parker (University of South Australia, Adelaide, Australia)

Journal of Property Investment & Finance

ISSN: 1463-578X

Article publication date: 29 July 2014

4038

Abstract

Purpose

The purpose of this paper is to investigate property investment decision making by Australian REITs.

Design/methodology/approach

Through an extensive literature review, a normative model of the property investment decision-making process is proposed. Based on semi-structured interviews with senior Australian REIT decision makers, a descriptive model of the property investment decision-making process by Australian REITs is developed. The normative model and descriptive model are compared and a prescriptive model of the Australian REIT property investment decision-making process proposed.

Findings

With the four stage, 20-step process proposed in the normative model found to be generally supported by the descriptive model developed, this may potentially comprise an effective prescriptive model for the Australian REIT property investment decision-making process.

Research limitations/implications

Further research is required to investigate if the prescriptive model is generalisable across other property investment decision-making groups or over time and whether it may lead to “good” decisions.

Practical implications

The prescriptive model proposed may contribute consistency and transparency to the decision-making process, if adopted by Australian REITs, potentially leading to better decisions.

Social implications

Greater consistency and transparency in property investment decision making by Australian REITs may lead to the optimal allocation of capital and greater investor confidence in the sector.

Originality/value

The findings comprise the first prescriptive model of the Australian REIT property investment decision-making process, forming a basis for comparative investigation of that process adopted by other property investment decision-making groups.

Keywords

Acknowledgements

The author acknowledges the valuable feedback on this paper provided by delegates at the European, American, Asian and Pacific Rim Real Estate Society conferences.

Citation

Parker, D. (2014), "Property investment decision making by Australian REITs", Journal of Property Investment & Finance, Vol. 32 No. 5, pp. 456-473. https://doi.org/10.1108/JPIF-04-2014-0025

Publisher

:

Emerald Group Publishing Limited

Copyright © 2014, Emerald Group Publishing Limited

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